Free payday loans are no longer new. Appetite, however, increases as you eat. Therefore, some active borrowers would like to go one step further and wonder if a free installment loan is possible. To find out, you first need to know the rules under which such loans operate and how companies can earn on such loans.
Do such loans exist?
When answering the question posed, we must say that such a loan does not exist in a trusted loan company (unless under certain conditions, but more on that later). This is due to several basic assumptions for the functioning of loans.
First, the costs of servicing a loan in installments are much higher than the costs of payday loans. In the worst case for a loan company (and in the best for customers), payday loans should be in the hands of the loan company after 60 days at the latest. With an installment loan, repayment can take place even within a few years, which are a kind of freezing of the company’s capital, and its earnings will be visible only for many months. For this reason, generally, installment loans are more expensive in general, which is understandable.
Secondly, one more point should be noted. Free payday loans are popular and eager to attract customers, and even attach them sentimentally to the company. So there is a high probability that a customer taking a free payday loan will return to the company, and it will come back quickly – the fastest after thirty days, and usually after a few months. Within a few years of one ongoing installment loan, the “payday” customer can come back even several or several times!
However, there are loan companies that usually offer free installment loans as part of promotional campaigns. However, there is a catch, though it will probably not disturb one group of customers. What catch is that?
Free installment loan from Saplo
Saplo loan offer is very simple. This company provides online installment loans in the amount from 1000 to 10,000 USD, with almost any choice of the number of installments to be repaid. When choosing the maximum amount, you have up to three years to pay back. Thanks to the ongoing “Test Saplo in 2018” promotion, the lender in this company not only has the right to repay the loan earlier (which, by the way, he is always entitled to), but also, if he does it within 30 days, once, Saplo he will not charge him any costs, in practice it will be payday pay, but with a very high amount. If he fails to do so within the prescribed period, the loan will be repaid in accordance with the agreement, i.e. in installments agreed with the Saplo.
First installment for free at OnCredit
We have already established that there is virtually no free installment loans. However, there are companies that allow the customer to partially reduce the cost of the loan and offer the first installment for free. For free, that is, without adding to it the costs of commission and administrative fees, which are evenly distributed over the number of installments.
OnCredit is such a company, which currently has this type of promotion in its offer – “First installment, lower repayment”. If only the person who first borrows from this company repays the first installment on time, OnCredit will reimburse him for the monthly commission payable.
Is it worth it at all?
It depends on what target group consumers are in. An installment loan for free is a good marketing ploy, and thus – thoughtful and finding recipients. The official policy of the company introducing such facilities is to familiarize the client with the idea of online loans and to familiarize him with the company’s offer, as well as to get acquainted with the way it works.
Ultimately, the operation of an installment loan for free is such as – like payday loan – to tie a customer to the company and get him to use the services of the company once again. However, such a loan can be very beneficial, especially for two types of clients.
The first is the borrower who needs cash and has the certainty that he will be able to repay the loan on time. However, he is prevented by the not very high amount that loan companies offer in the first payday loan. In addition, he does not want to bear the cost of the loan or has never taken such a loan before. For such a borrower, the situation with “testing the loan” is ideal – he gets both a free loan and an amount that interests him.
The second type of customer is the one who estimates that he will be able to repay the loan, but he is not sure about this and is afraid of a typical payday loan. On the other hand, he is drawn to the lack of loan costs. Also in this case, such a loan may turn out to be a win-win situation in which both parties profit, and the customer the most. He uses the benefits of a free payday pay, but if his leg is lost and he is unable to pay it back on time, he does not have to worry about recovery costs and potential problems. It is true that the cost of the loan will still have to be incurred in proportion to the installment loan, but it will not break the contract in any way, and he will be able to pay the money in installments.
Update: At the time of writing this article, there was simply no free installment loans. The situation changed with April 12, 2018, when Provident introduced start-up loans to its offer. In accordance with the promotion, which will apply until further notice (but hopefully this will not happen), new customers opting for Provident services can borrow $ 1,500 for repayment in four monthly installments and as long as they are not late with their repayment, they will not they will have to bear the cost of such a loan. The low loan amount and short financing period give you the chance to believe that it is a test loan. We will see to what extent such promotion fulfills its task and manages to accept among clients.